The Ascott Limited 1. Acquisition of Additional 60% Interest in Quest Apartment Hotels; and 2. Acquisition of 80% Interest in Synergy Global Housing 24 July 2017
Executive Summary 5 July 2017 – The Ascott Limited (“ Ascott) announced the acquisition additional 60% interest in Quest Apartment Hotels (“Quest”) . Ascott’s interest in Quest will increase to 80% post completion • Expected to complete in July 2017 • 24 July 2017 – Ascott further notches up business transformation with the acquisition of 80% interest in Synergy Global Housing (“Synergy”) . Expected to complete in July 2017 • Strategic Rationale of the Acquisitions Transformation of Ascott’s business to become an even more active and 1 dominant player in the hospitality eco-system, further solidifying Ascott’s leadership position in the serviced residence industry in the world Synergies and economies of scale arising from the acquisitions of these 2 strong operating platforms will propel Ascott's growth at an unprecedented pace Significant cross selling opportunities and synergies through 3 complementary geographical reach, target segments and strengths 2
Ascott’s Global Presence The acquisitions will further solidify Ascott’s leadership position in 1 the serviced residence industry in the world 502 1 31 Approx. 70,000 Properties Countries in > 120 Cities Apartment Units United Kingdom 6 Properties Ireland Belgium 1 Property 2 Properties Georgia Germany South Korea 5 Properties 1 Property France 4 Properties United States of America Japan China 30 Properties India 23 Properties 4 Properties 1 Spain 104 Properties 9 Properties Thailand Myanmar 1 Property 18 Properties 2 Properties The Philippines Cambodia GCC & Turkey 3 Properties 16 Properties 21 Properties Laos Malaysia 1 Property Vietnam 18 Properties 23 Properties Indonesia Brazil 2 Properties 14 Properties Singapore Australasia 9 Properties 10 + 175 2 Properties Figures above as at 21 July 2017; include units under development Note: 1. Exclude the number of properties under the Synergy corporate housing portfolio 2. Exclude Quest NewQuay Docklands, Quest Cannon Hill, Quest at Sydney Olympic Park, Quest Mascot and Quest Campbelltown which are owned by Ascott 3 and/or its affiliates
Propelling Ascott’s Expansion Plan Well on track to achieve target of 80,000 units under 2 management by 2020 80,000 Actual no. of units Target no. of units ~ 70,000 > 2,000 units Quest 52,000 > 11,000 units Synergy 43,000 39,000 34,000 2013 2014 2015 2016 YTD 2017 2020E The two acquisitions present opportunities for Ascott to access the growth in the global and national cross-selling networks, potential pipeline for turnkey delivery new-build projects and ready-operating properties. 4
Significant Cross Selling Opportunities Complementary geographical reach, target segments and 3 strengths Quest has market dominance in Ascott has strong presence in under-served suburban and key gateway cities throughout regional locations across Europe, Asia Pacific and the Australia, New Zealand and Fiji. Middle-East. Synergy has strong access to many renowned global technology companies headquartered in the U.S. West Coast. More accommodation options for Ascott’s corporate customers in the U.S., Australia, • New Zealand and Fiji Demand from Quest’s and Synergy’s corporate customers for accommodation outside • of the locations where they have market dominance can be fulfilled by Ascott 5
Acquisition of Additional 60% Interest in Quest Apartment Hotels 6
Background of the Transaction In October 2014, Ascott entered into a strategic partnership and acquired a 20% stake in Quest for A$29 million. Concurrently, Ascott REIT acquired three operating serviced residences in Greater • Sydney, namely the 140-unit Quest at Sydney Olympic Park, the 91-unit Quest Mascot, and the 81-unit Quest Campbelltown, for A$83 million Following the strategic partnership, Ascott acquired two serviced residences under development on a turnkey • basis, namely the 221-unit Quest NewQuay Docklands in Melbourne for A$71 million and the 100-unit Quest Cannon Hill in Brisbane for A$24 million 7
About Quest Quest is a leading player in the Australasian hospitality market and has an established track record of close to 30 years in the industry. Quest’s Existing Footprint 1 By State Largest serviced apartment provider in Australasia 4 1 Northern Fiji Territory 17 Close to 30 years of track record Queensland 12 6 Western Australia Portfolio of over 11,000 units South 26 Australia North across 180 properties New South Wales Island 29 53 Victoria South Located across Australia, New 4 Island 4 Tasmania Zealand and Fiji 156 operating properties in Australia, New Zealand and Fiji Note 1. By number of properties and excluding pipeline properties in Quest’s portfolio as at 30 June 2017 8
About Quest Quest is a leading player in the Australasian hospitality market and has an established track record of close to 30 years in the industry. Since opening its first property in Fitzroy, Melbourne in 1988, Quest has grown and evolved to become the largest serviced apartment provider in Australasia. Headquarters Melbourne, Australia Founder Mr Paul Constantinou No. of Direct 95 as at 30 June 2017 Employees Operating Statistics • Portfolio Occupancy: Over 70% As at FY 2016 • Portfolio ADR: A$175 9
About Quest Quest is a leading player in the Australasian hospitality market and has an established track record of close to 30 years in the industry. • Quest has 180 properties with over 9,000 existing units in Fastest growing Australia, New Zealand and Fiji, and over 2,000 units under and largest construction. serviced apartment provider • Target to grow network to 200 properties by 2020. in Australasia • Franchise agreements underpinned by properties with long- term lease agreements of 20 – 25 years Highly scalable • Strong franchisee and owner/developer relationships asset-light business • A healthy waiting list of franchise applicants franchise model • Over the past 3 years, 6 to 8 properties were added to Quest’s franchise network annually 10
About Quest Quest is a leading player in the Australasian hospitality market and has an established track record of close to 30 years in the industry. • Properties are located in CBDs, suburban and regional areas Focus on in close proximity to corporate head offices and business extended-stay parks corporate traveller • Over the past 3 years, corporate segment has contributed to segment approximately 70% of total accommodation revenue • Quest's top corporate clients include some of Australia's biggest companies such as Department of Defence, Strong direct sales Suncorp, ANZ Bank, and IAG & marketing channels • Quest.com and other direct sales channels contribute to more than 65% of bookings across their network 11
Strengthening Ascott’s Presence in Australia Deepen Ascott’s penetration in the stable and growing Australian market Australia has one of the most resilient economies in the developed world, having enjoyed over 26 consecutive years of economic growth. The country is rated ‘AAA’ by all three global rating agencies. Historic growth in international visitation to Australia in Australia’s Visitors Arrivals (mil) 1 2016, outpacing global and Asia-Pacific travel • Australia registered an 11% 1 YoY growth in visitor arrivals 7.6 in 2016, more than twice the 4% growth rate for global outbound travel and well above the 8% growth in 6.9 international tourism across the Asia-Pacific region 2 . 6.4 Tourism continues to be one of the fastest growing sectors 5.9 in the Australian economy; RevPAR continues to grow 5.6 5.4 5.3 5.1 5.1 5.1 5.1 • International visitors to Australia spent a record A$39.1 billion in 2016 i.e. an increase of 7% YoY 1 , more than twice the GDP growth of 2.3% 3 recorded in 2016. 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 • RevPAR is expected to grow by 3.1% to a national average of A$123 by 2019 4 . Notes: 1. Tourism Research Australia 2. Based on the most recent data from the World Tourism Organization’s Tourism Barometer. 3. Economist Intelligent Unit 4. Deloitte’s Tourism and Hotel Market Outlook (Edition 1, 2017) 12
Scalable Business Franchise Model Allows Ascott to leverage and build on Quest’s highly scalable franchise business model Quest • Pays upfront business franchise costs Secures lease/location of the • Pays recurrent property with Asset Owner Assigns lease to franchise fees Franchisee with franchise agreement Pays lease Franchisee Asset Owner • Operates the property • Owns the property • Earns operating income • Earns lease income Property Quest’s primary business model is asset -light and low-risk which allows the rapid growth of expected openings of between 6 – 8 new businesses or 600 – 1,000 keys per annum over the next five years. 13
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